I figured out how to get UEd 3.0 working properly under Windows 8.1
The problem was when using the mouse to move around in a viewport with "realtime preview" on it would move a mile when you only wanted an inch, making UEd pretty much unusable.
The fix was pretty easy, I just clicked "properties" on the icon and set the following Compatibility settings.
"Disable display scaling on high DPI settings" was the setting that did it.
I tried "Run compatibility troubleshooter" first but it was useless. Then I noticed a checkbox for high DPI settings. Since my GS502 gaming mouse is capable of up to 6400 DPI I figured that might be it. Checking it solved the problem.
Note that Epic's version numbers can be confusing. UEd 3.0 is the editor for UT2k4, not for UT3 as one might think.